Conventional versus nonconventional cash flow streams
The net annual cash flows for a capital expenditure proposal can be classified as either conventional (normal) or nonconventional (nonnormal). The following table lists the net annual cash flows for five proposed projects.
Project Year 0 Year 1 Year 2 Year 3 Year 4
A –$127,520 –$17,625 –$23,745 –$65,340 –$32,175
B –$275,150 $53,125 $61,135 $71,900 $96,325
C –$135,750 $28,120 $43,935 $52,775 –$67,835
D –$317,675 $70,745 $88,880 $95,425 $13,735
E –$195,985 $26,450 –$49,735 $39,510 –$58,275
Which project or projects exhibit a nonconventional cash flow stream?
O Project B only
O Project D only
O Projects A, C, and E
O Project A only
